We'll sue, investors warn Emess

Saturday 27 April 2002 23:00 BST

REBEL shareholders at lighting firm Emess are considering legal action against the company just as it is poised to publish restructuring plans.

Because of previous years' losses, the company is unable to pay dividends and is asking investors to back a share shake-up enabling it to resume payments. Emess is expected to announce a vote on the proposals in the next couple of weeks.

But the scheme would reduce the rights of preference shareholders, who are at loggerheads with the group after it stopped paying them dividends, though it made a special payment to ordinary shareholders two years ago.

Peter Calver, founder of the Emess Shareholder Action Group which represents preference shareholders, said the proposals undervalued the rights of preference shareholders. He is expected to recommend his members to vote against the proposals. He added: 'We are continuing to consider legal action against the company over the dividend payment to ordinary shareholders.'

Emess has £21m cash, but at its closing share price last week of 5 1/4p it had a market value of just £5.7m.

The company sold its overseas businesses two years ago and plans to expand its UK operation. Raymond Davies, who stepped down as part time executive chairman this month and remains a non-executive director, said: 'We hope the restructuring will go through so we can get on with running the business.'